13
APR
2015

Facilitation payments

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Facilitation payments

A medium sized company (“A”) has acquired a new customer in a foreign country (“B”) where it operates through its agent company (“C”). Its bribery risk assessment has identified facilitation payments as a significant problem in securing reliable importation into B and transport to its new customer’s manufacturing locations. These sometimes take the form of ‘inspection fees’ required before B’s import inspectors will issue a certificate of inspection and thereby facilitate the clearance of goods.
A could consider any or a combination of the following:
1. Communication of its policy of non-payment of facilitation payment to C and its staff.
2. Seeking advice on the law of B relating to certificates of inspection and fees for these to differentiate between properly payable fees and disguised requests for facilitation payments.
3. Building realistic timescales into the planning of the project so that shipping, importation and delivery schedules allow where feasible for resisting and testing demands for facilitation payments.
4. Requesting that C train its staff about resisting demands for facilitation payments and the relevant local law and provisions of the Bribery Act 2010.
5. Proposing or including as part of any contractual arrangement certain procedures for C and its staff, which may include one or more of the following, if appropriate:
questioning of legitimacy of demands

  • requesting receipts and identification details of the official making the demand

  • requests to consult with superior officials

  • Trying to avoid paying ‘inspection fees’ (if not properly due) in cash and directly to an official

  • Informing those demanding payments that compliance with the demand may mean that A (and possibly C) will commit an offence under UK law

  • Informing those demanding payments that it will be necessary for C to inform the UK embassy of the demand.

6. Maintaining close liaison with C so as to keep abreast of any local developments that may provide solutions and encouraging C to develop its own strategies based on local knowledge.
7. Use of any UK diplomatic channels or participation in locally active non-governmental organisations, so as to apply pressure on the authorities of B to take action to stop demands for facilitation payments.

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